U.S. to Trim School Medicaid Payments After Freeze

The Bush administration has
followed through on a proposal to
stop reimbursing schools for certain
services provided to Medicaid-eligible students, but school
groups say they plan to use the
six months before the new rules
go into effect to fight the changes.

The
Centers for Medicare and
Medicaid Services plans to halt
the reimbursements for the costs
of transporting eligible children
from home to school and back.
School districts contend they are
entitled to those transportation expenses
when Medicaid-eligible services
such as speech or physical
therapy are provided at school.

Medicaid would also stop paying
school administrative costs for
identifying and enrolling Medicaid-eligible students, and for coordinating
the provision of medical
services covered under a state’s
Medicaid plan.

The changes were announced
Dec. 21, the Friday before Congress
and many school districts
went on break before the winter
holidays. However, before Congress
wrapped up its session for
the year, it approved the Medicare,
Medicaid, and SCHIP Extension Act
of 2007, which includes a provision
that freezes the implementation of
the new reimbursement rules
until June 30. President Bush
signed the bill Dec. 29.

“What’s great is that we have
the moratorium,” said Kathleen
Cummins Merry, the director of
Medicaid services for Michigan’s
Wayne County Regional Education
Services Agency, which provides
special education services to
34 school districts, including Detroit.
“We’re going to continue to
work with our congressional delegations
to see what can be done
about extending the moratorium,
or get legislation introduced to
stop the changes.”

The Centers for Medicare and
Medicaid Services, or CMS, a
branch of the Department of
Health and Human Services, proposed
the changes last August.
The centers estimated that eliminating
certain reimbursements
would save the federal health-insurance
program for the poor an
estimated $635 million in its first
year of implementation, and $3.6
billion over five years. ("U.S. Proposes to Trim School Medicaid Funding," Sept. 12, 2007).

The revised policy will ensure
that Medicaid is not paying for
expenses that should properly be
borne by other agencies, or that
are inappropriate for a health-care
program, the CMS has said.
The final rule was published in
the Federal Register on Dec. 28.

Response to Comments

The Medicaid agency was unconvinced
by those who criticized
the proposed rule change during a
60-day comment period. In its
analysis of the comments, CMS
said that district complaints
about the loss of money bolstered
the agency’s opinion that money
is being spent inappropriately on
non-Medicaid services.

For example, some commenters
said that the loss of funds would
mean cuts in electives, after-school
activities, and music programs.

“Constrained local and state
funding for education is not the
basis for deciding whether a cost
is properly claimed under Medicaid,”
the agency said in its comments
accompanying the final
rule. “We believe the final rule is
necessary to maintain the financial
integrity of the Medicaid program.”

The CMS has a “complete misunderstanding”
of how school districts
operate, said Mary Kusler,
the assistant director of government
relations for the American
Association of School Administrators,
based in Arlington, Va.

The Medicaid agency forgets
that its money is reimbursing
school districts for dollars that
have already been spent, and will
continue to be spent, on Medicaid-eligible
services, Ms. Kusler said.
The reimbursement is then used
to pay for other school services.

“We are using their money to
plug the hole,” she said.

The fact that the six-month
moratorium was included in a
larger bill relating to Medicaid is
a sign of legislative support for allowing
schools to claim certain reimbursements,
Ms. Kusler said.

“We’re not going to give up,”
said Ms. Merry, the Michigan official.
“I look at this as an absolute
entitlement.”

Vol. 27, Issue 17, Page 17

Published in Print: January 9, 2008, as U.S. to Trim School Medicaid Payments After Freeze

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